Farmers and businesses impacted by Food and Drug Administration warnings against eating some types of tomatoes may be able to bring some valid insurance claims, according to a law firm.
That analysis came from the Washington law firm Reed Smith, which has a background in insurance coverage matters involving contaminated crops and food products.
The law firm said insurers could see claims from several areas:
o Under first-party property policies, to the extent that crops spoiled due to a government order not to sell or to destroy canned tomatoes.
o Under business income and contingent business income policies for loss of profits due to a partial shutdown of suppliers/distributors/growers operations.
o Under general liability policies for costs to recall tomatoes in order to avoid injury to others.
o Under specialty recall policies.
The firm advised policyholders to immediately give notice to their insurance companies of any impact due to the tomato recall, regardless of whether there will ultimately be a claim, to avoid noncoverage due to late notice.
"It's important to bear in mind that insurance company 'independent' adjusters are not acting in the policyholder's best interest, and it is critical to work with legal counsel and expert claims preparers to assist with submitting claims in a fashion that is acceptable to the insurers while also holding insurers' feet to the fire to pay claims," said a statement issued by a spokesperson for the firm.
Insurers, according to Reed Smith, are likely to contest many of the claims that the firm outlined.
A customer, the firm said, can "expect a fight with the insurance company on a major claim," and the attorneys advised they should "be careful to document all losses and all communications with insurance carriers. Categorizing and documenting costs and expenses associated with the recall on an 'as you go' basis is crucial, and likely cannot be replicated if not done in that manner."
Coverage is quite often available under a policy that might not be readily apparent, but that a lawyer and/or claim expert can identify, the law firm said.
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